On their second day of trading, the Ethereum ETFs experienced a significant decline in inflows, with net outflows totalling $113.3 million.
Grayscale's Ethereum Trust, with its negative counterbalance against the other ETFs, was the main driver of these outflows.
Fidelity's FETH and Bitwise's ETHW were the top inflows on the second day.
The performance of Ethereum ETFs mirrors Bitcoin's early ETF experience, with initial inflows followed by outflows.
Analysis shows that we might see a possible price correction for Ethereum by August, followed by a massive rally to $5,400 by October.
After wowing the market with more than $100 million in cumulative inflows on their first day of trading, the trend has changed, and the spot Ethereum ETFs in the US have now started down a trail of red.
To say the least, the Ethereum ETF performance for 24 July remained underwhelming, largely due to the massive outflows from Grayscale’s recently converted Ethereum Trust.
All of these combined factors have resulted in net outflows of around $113.3 million, showing that the road may be smoother than investors want it to be.
Interestingly, data from Farside shows that seven out of eight of these ETF issuers saw positive inflows on 24 July.
The most bullish of them all was Fidelity’s FETH, which saw inflows of around $74.5 million (after being third a day before).
Followed closely was Bitwise’s ETHW, the second position from 23 and 24 July with $29.6 million.
Interestingly, BlackRock's ETHA, which was the strongest on 23 July, crashed from $266 million in inflows to a mere $17.4 million on the 24 July.
21 Shares’ CETH saw zero inflows, with others like Invesco and Franklin Templeton seeing $2.5 million and $3.9 million respectively
The performance Snapshot
Interestingly enough, Grayscale's Ethereum Trust (or ETHE) worked against most of the rest, counterbalancing their positive inflows with a massive outflow of $326.9 million from ETHE on the same day.
Cumulatively, this means that the ETF market lost around $133.3 million on the second day of trading—compared to the previous day's $106.6 million—and the spot Ethereum ETF market is currently in the red.
It is also interesting how the performance of the spot Ethereum ETF market mirrors that of Bitcoin, which saw net outflows in 6/10 of its first trading days.
So far, analysts believe that the outflows from the Grayscale Bitcoin and Ethereum ETFs might be playing a significant role in enforcing this correlation.
It is also interesting to note that soon after the 11 January launch of the spot Bitcoin ETFs, the cryptocurrency declined by some 21% from a high of $48,969.
Soon after this, it rebounded from $39,341 on 23 January before rallying by 91% to its all-time high of $73,800.
We are seeing something similar happen with Ethereum, which is already down by around 11% from its 22 July high of $3,500.
Ethereum’s possible trajectory
The following is no guarantee, but consider the illustration above.
If we see more similarities between Ethereum and Bitcoin—a 20% decline in two weeks, followed by a 90% price rally in three months—we can expect a dip and retest of the $2,840 zone between now and the first week of August, before a massive upswing to $5,400 at least by October.
In light of the upcoming US presidential elections and the market volatility that follows, we can expect a pullback from this $5,400 high between October and November.
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